Report: FanDuel linked with reverse merger
Potential buyer Platinum Eagle has a reported desire to acquire digital media and streaming companies
FanDuel is “likely to participate in a reverse merger” with a NASDAQ-listed acquisition company, according to a new report from financial news outlet Axios.
The site linked FanDuel with Platinum Eagle Acquisition Corp, a new company formed this year by veteran Hollywood executives Jeff Sagansky and Harry Sloan.
According to Axios, Platinum Eagle is a special purpose acquisition company, essentially created to raise money and buy other companies.
Platinum Eagles has reportedly raised $325m and is targeting FanDuel with its funds, although no specific detail of a potential deal was given.
Sagansky said in January the firm was looking to invest in digital media and streaming companies, while FanDuel has made some steps in this direction having recently integrated the NBA’s streaming service League Pass into its platform.
Axios noted: “One source says to think about the Platinum Eagle deal more as a fundraise for FanDuel than as an exit for FanDuel investors.”
A reverse merger is one way take a company public without going through an IPO.
A FanDuel sale has been well flagged, following the departure of all five of the company’s co-founders, including CEO Nigel Eccles.
Private equity firms, international sportsbooks and US casino firms have all been mooted as potential acquirers.
Paul Charchian, the founder of rival DFS site Fanball, told EGR recently a sale could help return FanDuel to growth after a relatively stagnant couple of years.
“They still have a tremendous number of users, great loyalty and incredible mindshare that everyone else in the industry would love to have,” Charchian said.
“When and if there’s an ownership change, the new owner will inject some new cash, new ideas, new features and enhance an already sizable company.”
Charchian said specifically some new cash could help FanDuel expand beyond its core salary cap format into new forms of DFS that the market is “clamoring for”.
An expansion into sports betting is also considered a value driver for potential investors.